Expense rules in India.
All CBIC rules: 18% GST on services, LTA allowances, mission allowances and VAT recovery in India.
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1Expense rules & reclaimable VAT
| Category | VAT | Reclaim | Cap / Note |
|---|---|---|---|
| Business meals | 5% / 18% | Limited reclaim | ITC rules vary by type |
| Travel meals | 5% | 100% reclaimable | If business purpose |
| Accommodation | 12% / 18% | 100% reclaimable | Tax invoice required |
| Fuel | Excise + VAT | 100% reclaimable | Business records |
| Train / IRCTC / flight | 5% / 12% | 100% reclaimable | Public transport |
| Taxi / Ola / Uber | 5% | 100% reclaimable | E-invoice accepted |
| Client gifts | 18% | Not reclaimable | Section 17(5) blocked credit |
| Parking | 18% | 100% reclaimable | Tax invoice |
LTA
LTA tax-exempt 2 trips / 4 years.
Standard ratio
Intra-state: CGST + SGST. Inter-state: IGST.
Retention
GST records: 6 years (CGST Act §36).
2Mileage allowance
| Mode | Allowance | Cap | Note |
|---|---|---|---|
| Personal car | INR 10/km | By company | Standard practice |
| Company car | Tax-exempt monthly | — | Section 17(2) ITA |
| Motorcycle | INR 5/km | By company | Reduced rate |
No federal rate
No national rate.
MNC practice
Private sector standard.
Records
Date, destination, km, business purpose.
3Per diem and travel allowances
| Destination | Meal | Lodging / night | Daily rate |
|---|---|---|---|
| Mumbai / Delhi | INR 1,500 | INR 5,000 | INR 6,500 |
| Bangalore / Chennai | INR 1,200 | INR 4,000 | INR 5,200 |
| Senior executive | INR 2,500 | INR 8,000 | INR 10,500 |
| Foreign — Singapore | INR 4,000 | INR 12,000 | INR 16,000 |
| Foreign — London | INR 5,000 | INR 18,000 | INR 23,000 |
MNC practice
Standard executive per diem.
Hotel separate
Lodging refunded on invoice.
LTA distinct
LTA separate from per diem.
4Foreign VAT recovery
| Zone | Mechanism | Deadline | Method |
|---|---|---|---|
| India → EU | 13th Directive if eligible | Variable | Direct filing per EU country |
| France | No reciprocity | — | No agreement |
| United Kingdom | Reciprocity | 31 Dec. N+1 | HMRC VAT65A |
| Switzerland | Reciprocity | 30 June N+1 | FTA Form 1222 |
| USA | No recovery | — | Sales tax not recoverable |
| IN GST for foreign | No general refund | — | Section 54 limited |
No B2B refund
No foreign B2B refund procedure.
SEZ refund
SEZ only.
Outbound recovery
IN company recovers EU VAT via 13th Directive.
Industrialize your India expenses with Illizeo.
GST 5%/12%/18%/28%, LTA, MNC per diem, multi-currency INR↔USD↔EUR↔CHF: all the CBIC rules above are natively integrated into Illizeo.
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